Do you know about taxes imposed on citizens?

Table of Contents

What is a Tax?

An individual or an entity have imposed a mandatory monetary charge by a Governmental organization known as Tax. The Government of a Nation or a state funds the public expenses such as security, public infrastructure, healthcare, etc. through the taxes imposed on the citizens of the nation or a state. An individual or an entity failing or resisting taxation is punishable as per Government law.

In India, there are 1.46 crore taxpayers as per the confirmation given by the Central Board of Direct Taxes. Among them, an annual income of one crore taxpayers ranges between 5 lakhs to 10 lakhs and the remaining forty-six lakhs taxpayer’s annual income exceeds 10 lakhs.

Types of Taxes Imposed in India?

There are two types of taxes based on how they have implied to the individual citizen or an entity. They are Direct tax and Indirect tax.

Direct Tax Imposed on Citizens:

The taxes paid by an individual directly to the governmental organization known as the Direct Tax. The Direct Taxes are paid by the taxpayer based on their capability to pay. In India, direct taxes have governed by The Central Board of Direct Taxes (CBDT).

The following are the Direct Taxes implied on individuals.

Income Tax

An Income tax is a mandatory financial charge or some other type of levy imposed on individuals or entities termed as taxpayers in respect of the income, money received in exchange for providing service or goods or profits, by investing capital earned by the taxpayers which are generally termed as taxable income.

Stamp Duty/ Transfer Tax

A monetary charge imposed by a state or municipality for transferring a property from one ownership or title (seller of the property) to another ownership (the buyer of the property) known as The stamp duty or transfer tax. Transfer tax have based on the property value and the property classification which have transferred. In India, both the buyer and the seller are liable to pay the stamp duty under Section 3 of the Indian Stamp Act, 1899.

Property Tax

A monetary charge levied by the governmental organization on the property owned by an individual or an entity within the jurisdiction of the nation known as property tax. In India, property tax have imposed yearly by the state government of India based on the annual rental value. Most of the metro cities impose a tax on vacant land too. Property taxes have exempted on religious buildings and lands, heritage sites and central government properties.

Entitlement Tax

A direct tax received by the governmental organization through payroll deductions known as entitlement tax. These taxes help people enjoy social programs like social security, medical care, etc.

Capital Gains Tax

A mandatory charge implied by the government on the growth of investment’s value such as real estate, stocks or business incurred when individuals or corporations sell those investments known as capital gains tax. Capital gains tax have calculated based on the difference between the cost of purchase and the selling amount.

Corporate Tax

Government organization implies a tax under Income-tax Act in India on a corporate (Organization act as an independent entity authorized by the state) both domestic and foreign companies. For a domestic company (registered under the Companies Act of India) corporate tax have implied on its universal income. For a foreign company (Not registered under the Companies Act of India) corporate tax is implied only on income earned in India.

Payroll Tax:

A charge levied on the payroll of the employer which comprises wages, gross salaries, and any form of remuneration that paid to the employees known as payroll tax. Payroll taxes withheld by the employer from his/ her employee’s salary.

Do you know about taxes imposed on citizens? Types of Taxes.

Indirect Taxes Imposed on Citizens:

The taxes paid by an individual or a consumer not directly to the government but through the sellers of the goods or service providers known as Indirect taxes. These taxes have imposed on services and materialistic goods.

The following are the indirect taxes imposed on the individual:

Goods and Service Tax (GST)

Goods and Service Tax implied on all the supply of goods and services in India as an indirect tax from 2015. This tax levied by various different tax slabs as 0%, 5%, 12%, 18% and 28%. Goods and Service Tax applied to almost every sector even including life insurance policies. Products such as alcoholic drinks, petroleum and electricity have exempted from this tax but under the old tax system. GST have governed by the GST council having 33 members comprising 2 from the Centre and 31 from 28 states and 3 Union territories. The state government and central government share GST on a 50-50 basis. The total count of taxpayers was 1.14 crores as of October 2018.

Goods and service tax introduced in India to eradicate various indirect taxes imposed on the people such as Value Added Tax (VAT), customs duty and excise taxes.

Click here to know how to calculate your taxes on your own.

Conclusion

Citizens of the nation who resist paying the taxes are liable to punishment and end up in prison. These taxes help to develop the nation in the economy, infrastructure, and security of the nation. Every citizen of the nation must pay their taxes for the betterment of themselves, their nation and fellow citizens.

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